Consumer optimism in the US housing market grew in March, according to new figures from Fannie Mae.
The government-sponsored enterprise revealed that its Home Purchase Sentiment Index (HPSI) increased month-over-month in March by 5.2 points to 81.7.
The HSPI distills information about consumers’ home purchase sentiment from Fannie Mae’s National Housing Survey (NHS) into a single number, which reflects their current views and forward-looking expectations of housing market conditions.
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Broken down by some of its key components, HSPI figures showed that the percentage of respondents who say it is a good time to buy a home increased from 48% to 53%, while the percentage of respondents who say it is a good time to sell a home increased from 55% to 61%.
Meanwhile, the percentage of respondents who say home prices will go up in the next 12 months increased from 47% to 50%.
However, consumers are less optimistic about mortgage rates going down – with HSPI data showing that the percentage of respondents who say rates will decline over the next 12 months decreased from 8% to 6%.
Still, Doug Duncan, senior vice president and chief economist at Fannie Mae, said that the significant overall increase in the HPSI in March “reflects consumer optimism toward the housing market and larger economy as vaccinations continue to roll out, a third round of stimulus checks was distributed, and the spring homebuying season began.”
“Home-selling sentiment experienced positive momentum across most consumer segments – nearly reaching pre-pandemic levels and generally indicative of a strong seller’s market,” said Duncan. “Consumers once again cited high home prices and tight inventory as primary reasons why it’s a good time to sell.”
Duncan warned, however, that, while the net “good time to buy” component increased month over month, it “has not recovered to pre-pandemic levels, as the homebuying experience continues to prove difficult for many of the same reasons, namely high prices and a lack of supply.”